Pressure from the silver market and geopolitical tensions ease
According to Kitco, although gold attracted the most attention in the market, the decline of this metal was still insignificant compared to silver's failed breakthrough. In the overnight trading session, silver futures surged to over $34 an ounce, hitting their highest level since late October. However, this increase did not last long, as prices closed below 33 USD/ounce.
As of 15:07 ET, the price of March silver futures was traded at 32.585 USD/ounce, up nearly 0.42% compared to last week. However, the metal fell more than 4% from its peak on Friday.
Meanwhile, gold is heading for a slight increase this week. February gold futures last traded at $2,896.80 an ounce, up about $10 from last week.
Phillip Streible - Chief Strategist at Blue Line Futures - said that the sell-off in the silver market has dragged the entire precious metal sector down. He said that although the increase in silver to over 34 USD/ounce was a remarkable development, due to high volatility, many investors did not miss the opportunity to make a profit.
Siliver has had an impressive increase and for many investors who have bought when the price is below 30, this is a good way to end the week, he said.
In addition, Streible said that the decline in geopolitical tensions is reducing the safe-haven attractiveness of gold.
This week, US President Donald Trump held a phone call with Russian President Vladimir Putin about the possibility of ending the war in Ukraine. At the same time, despite continuing to threaten to impose strong trade tariffs, he has delayed major moves until the completion of each country's assessment - expected to be completed in April. However, at the beginning of the week, Mr. Trump announced a 25% tax rate on all imported steel and aluminum products.
Gold prices continue to maintain an upward trend in the context of economic instability
Despite strong market fluctuations in the short term, many analysts still expect gold prices to maintain a solid uptrend due to many uncertainties in US policies.
In the context of uncertainty in the economy and geopolitics combined with inconsistent moves from the US President, the steady increase in gold shows a gloomy outlook but not yet catastrophic, said Ricardo Evangelista, Senior Analyst at ActivTrades.
Although gold prices did not move positively in the last session of the week, Naeem Aslam - Investment Director at Zaye Capital Markets - noted that this precious metal still showed steady strength in a challenging week.
The US consumer price index (CPI) showed annual inflation increased by 3.0% in January, higher than expected. At the same time, during a two-day hearing before the National Assembly, Federal Reserve Chairman Jerome Powell reaffirmed the central bank's neutral stance, emphasizing that the Fed is in no rush to cut interest rates due to high inflation risks and a healthy labor market.
Golds resilience to hotter-than-expected CPI data and Powells cautious stance show strong support, possibly due to concerns about persistent inflation and safe-haven demand.
Typically, higher inflation and delays in rate cuts will put pressure on gold due to rising real yields. However, as economic uncertainty increases, especially as consumption weakens, investors may be preparing for the risk of inflation. The market's quiet reaction to Mr. Powell's comments shows that traders have priced into a long-term high-interest scenario. In addition, geopolitical tensions and central bank gold purchases continue to create a floor for gold prices, Aslam said.
Facts to watch next week
The economic calendar next week is also quite light, with the minutes of the Fed's most recent monetary policy meeting being an important highlight. However, economists do not expect the minutes to reveal any major changes in policymakers' views.
Some analysts believe that gold prices will still be sensitive to geopolitical instability in the upcoming short trading week, as the US market closes on Monday on the occasion of President's Day
